Here's the thing about momentum stories: they're easy to tell when the numbers cooperate. And on the surface, the numbers cooperate just fine. Nearly all Canadian wealth managers surveyed — about 92% — plan to hold or increase their alternatives exposure. Demand for Private Equity and Infrastructure is climbing. Evergreen funds have become the go-to structure.
So yes, the freight train is still moving.
But the more interesting story isn't on the surface. It's in what iCapital Canada's 2025 Private Markets Survey1 — built from roughly 50 wealth management firms across Canada — quietly reveals underneath those headline figures.
Growth is slowing. The pace of adoption has cooled from last year. And that's actually good news — because it means the market is maturing rather than overheating. This isn't a pullback. It's a pivot from novelty to discipline.
Commitment Without the Frenzy
The survey's core finding holds up: "momentum towards alternative investments remains strong as ~92% of respondents plan to increase or maintain current allocations." Nearly half plan to increase over the next 12 to 18 months, with most of those targeting growth above 5%.
But iCapital doesn't spin this as a blowout. "Growth has moderated year over year," the report notes plainly. "While nearly two-thirds of respondents increased their allocations last year — and roughly half of those by more than 5% — the pace of growth has slowed in 2025."
Why? "This moderation reflects a greater level of allocation maturity, with many advisors satisfied with current levels of exposure."
Read that again. Advisors aren't pulling back — they're arriving. A target range of 10–25% private markets exposure is crystallising, with nearly half of respondents already parked within that band. The frantic ramp-up phase is fading. What's replacing it is something more useful: a stable, defensible allocation that advisors can actually explain to clients.
Private Equity Is Back on Top. Private Credit Is Still Fine.
The asset class rankings shifted in a way worth paying attention to. In 2024, Private Credit held the top spot, followed by Private Equity and Infrastructure. This year? "Private Credit fell from #1 to #3, while Private Equity and Infrastructure both moved up one position."
Don't misread that as a downgrade. Private Credit demand is still strong in absolute terms. What's happened is more subtle — as the asset class has become widely distributed and better understood, it's graduated from exciting to expected. Private Equity and Infrastructure, meanwhile, are pulling more attention as advisors go looking for genuine diversification and long-duration return drivers.
Below that top tier, Real Estate, PE Secondaries, and Hedge Funds held their relative positions from last year. The overall mix is stable. What's changed is the spread: "demand [is] becoming less concentrated in the core asset classes." Advisors are broadening. That's a sign of sophistication, not confusion.
Two Managers. That's It.
Half of all respondents prefer exactly two managers per asset class. Only 27% want three or more. Just 19% prefer going it alone with one.
This isn't indecision — it's deliberate. Advisors are "deliberately balancing diversification with manageability." They want alternatives to work in their practice, which means the strategy needs to be explainable, the lineup needs to be defensible, and the administration can't become a second job.
For GPs, the message is blunt: "in order to win shelf space, GPs must clearly position themselves as complementary to existing offerings in Canada rather than duplicative." The Canadian market doesn't reward complexity. It rewards fit. If your fund overlaps with what's already in an advisor's lineup, you're not competing for allocation — you're competing against inertia. That's a harder battle.
The Friction Problem Hasn't Gone Away
Here's where the survey gets honest. Liquidity constraints and higher fees remain the biggest barriers to broader adoption. Subscription friction persists — even with digital tools available. And 79% of advisors say registered account eligibility (think RRSPs) is essential or important to their clients, with nearly a quarter calling it outright essential.
No amount of education fixes a structural access problem. "Liquidity constraints and higher fee structures remain the most significant barriers, underscoring that operational challenges, not lack of interest, continue to limit broader advisor and wealth-channel adoption."
Currency hedging has also become a sharper issue. Sixty-one percent of respondents now view CAD/USD hedging as essential or important — up meaningfully — as geopolitical noise and exchange rate volatility have made unhedged structures harder to recommend. "Advisors are increasingly favouring funds that offer hedged share classes to help mitigate foreign exchange risk for clients." If your fund doesn't offer a hedged share class in Canada, that's a gap your competitors may already be filling.
The Shift from Education to Evidence
Last year's surveys — both 2024 and 2025 — flagged the need for better educational support around alternatives. That's been heard and addressed. But something has shifted. The ask has moved up the sophistication ladder.
Advisors don't need to be convinced that alternatives belong in a portfolio. They need tools that show, quantitatively, what happens to a portfolio when alternatives are added. "Emphasis has shifted toward modelling and analytics, with this year's respondents placing greater weight on tools that clearly demonstrate how alternatives influence overall portfolio outcomes."
That's a maturity signal. The conceptual debate is largely settled. What advisors want now is the modelling rigour to support implementation — scenario analysis, risk-impact tools, holistic reporting. Platforms and managers who can deliver that have a real edge.
What Advisors and Investors Should Take Away
1. The 10–25% band is where consensus is forming. If you're in that range, you're in good company. If you're outside it — either direction — know why.
2. Two complementary managers per asset class is the emerging standard. Build with that frame. Redundancy wastes shelf space and muddies client conversations.
3. Registered account eligibility isn't a nice-to-have. If the fund can't go into an RRSP, that's a real distribution constraint. Plan accordingly.
4. Currency hedging has crossed from optional to expected. In the current CAD/USD environment, an unhedged-only structure needs a strong argument behind it.
5. The next gap is analytics, not awareness. Your clients know what alternatives are. What they need is a clear picture of what those alternatives actually do to their portfolio.
The 2025 survey doesn't tell a retreat story. It tells a maturity story — a market moving from adoption to integration, from enthusiasm to discipline. For advisors doing this work seriously, that's exactly the environment where well-constructed private markets exposure earns its place.
Footnote:
1 iCapital Canada, 2025 Canada Private Markets Survey Results, March 2026. Survey conducted October 2025.
